credit crunch

Australian Bank Guarantee on Wholesale Debt

24 October 2008

In a post earlier this week, I wrote The Government was right to step in with the guarantee and it has doubtless provided some stability for a financial system that remains jittery, but the sooner the details are sorted out, the better. The main outstanding question I was referring to was how the guarantee would [...]

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Banks Covered by the Australian Government Guarantee

24 October 2008

Following the shenanigans in parliament earlier this week, the Government has modified their original 12 October media release about the Government guarantee for banks. In the process they no longer list the local and foreign banks covered by the guarantee, so with the help of Google’s cache* I am republishing the original list here. The [...]

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Market Capitulation

24 October 2008

Apparently the sky is falling, at least that is what stock markets around the world are suggesting. The Japanese stock market fell 9.6% today, the Korean market fell 10.6% and while the Australian market “only” fell by 2.6%, the Australian dollar is now down below US$0.65. European markets are already down 6-8%. There were dramatic [...]

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Update on the Guarantee of Australian Banks

22 October 2008

Treasury Secretary, Ken Henry, appeared before a Senate Estimates Committee today to provide some clarity on the nature of the consultation between the Government, Treasury and the Reserve Bank prior to the 12 October announcement that the Government would provide guarantees for all Australian banks. This followed yesterday’s article in The Australian which claimed that [...]

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Come Back Keynes, All Is Forgiven!

16 October 2008

In current phase of the GFC* we are witnessing extraordinary Government intervention in the financial markets, with a host of countries providing enormous guarantees of bank liabilities, purchasing distressed assets or directly investing in ailing banks. Switzerland is the most recent country to follow this route, injecting around 6 billion Swiss Francs (A$8 billion) into [...]

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US Treasury: Proud New Owner of America’s Banks

14 October 2008

The latest moves by the US Treasury in the GFC have been hitting news headlines on the screens today: US TO INVEST $250 BILLION DIRECTLY INTO BANKS US TO GET PREFERRED SHARES IN BANKS US TO INVEST IN MORGAN STANLEY, GOLDMAN, JPMORGAN, BANK OF NEW YORK, STATE STREET, CITIGROUP, BANK OF AMERICA, WELLS US TO [...]

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Australian Banks Get A Government Guarantee

13 October 2008

In the latest instalment of the Global Financial Crisis (“GFC”), following the lead of Ireland and other countries, the Australian Government has taken the extraordinary step of guaranteeing all deposits with Australian banks, building societies and credit unions as well as locally incorporated subsidiaries of foreign banks. The guarantee can also extend to wholesale debt [...]

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Irish Government Bails Out All Irish Banks

30 September 2008

In the latest development in the ongoing train-wreck that is global financial markets, the Irish Government has stepped in to guarantee deposits and debt of all Irish Banks. This is an extraordinary step to take and reflects a banking system that is truly broken. Finance, particularly banking, is built on trust more than law (as [...]

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The Mother of All Bailouts

25 September 2008

Financial markets around the world remain extremely anxious as the US Congress ponders the Troubled Asset Relief Program (“TARP”) proposal, aka the Mother of All Bailouts (“MOAB”). Under this proposal, the US Government will spend up to US$700 billion to buy “troubled” mortgage-backed securities in the hope that this will lubricate the markets that have [...]

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“Eat My Shorts” – Short Selling in Australia

25 September 2008

Earlier this week, Australia joined the US, the UK, France, Germany, Canada and other countries in clamping down on the practice of “short selling” shares. According to the regulator, the Australian Securities and Investments Commision (ASIC), the new restrictions were aimed at reducing “unwarranted price fluctuations”. For the moment, the restrictions are in place for [...]

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